Internet Power Fails Poor Countries

from the sold-a-bill-of-goods dept

Small countries that spent heavily on building an internet infrastructure at the pleadings of some businesses have found that the returns aren't what they were expecting. In many countries, people don't feel comfortable conducting any kind of transaction over the internet. They would prefer to know the person personally, and so they don't see how e-commerce can be trustworthy. I wonder if this is just a function of time and education, though. As people become more familiar with how the internet works, they learn (hopefully) how to find sites they can trust as well.

Reader Comments

It

In many countries, people don't feel comfortable conducting any kind of transaction over the internet. They would prefer to know the person personally, and so they don't see how e-commerce can be trustworthy. I wonder if this is just a function of time and education, though. As people become more familiar with how the internet works, they learn (hopefully) how to find sites they can trust as well.

It's a natural problem

In many countries, people don't feel comfortable conducting any kind of transaction over the internet. They would prefer to know the person personally, and so they don't see how e-commerce can be trustworthy. I wonder if this is just a function of time and education, though.

One of the most interesting components of a capitalism, and especially a modern advanced economy, is the ability to execute a transaction with someone you don't know.This depends on you trusting a set of intermediaries, and upon an interconnected web of social structures (limited-liability companies, rule of law, etc) that cannot be implanted overnight. If you lack those things you only do business with people you know personally and/or with whom you can get restitution/revenge directly.There are alternatives (e.g. the halal system) but they don't really scale for other transactions. Usually you get crony capitalism and/or speculative crashes, which the developed world went through for centuries and the mechanisms were ironed out.Thus people in some countries have a hard time imagining doing a transaction over the Internet with someone they don't know because they would have a hard time doing one over the phone. Don't remember most of the developed world's "internet applications" are really just catalogue shopping -- something people are already familiar with. I wonder if the Internet could be used to help the fishermen in India who are already very comfortable with getting pricing at sea via mobile phone...but they already have a solution!(Some references: I highly highly recommend "The Cash Nexus" by Niall Ferguson, and also "They Mystery of Capital" by Hernando de Soto. Please don't buy them online).

Re: It's a natural problem

Stated very well. I would also add that technical support for non-English languages is often a complex affair: the selection of software is often poor; security patches available for the US operating system may not be available for the other language, so malware wreaks more havoc; US software may not work on the machine, because the foreign version of windows works differently. I know from experience that word documents written on US machines/Japanese machines can make each other go berserk. Poorer countries also receive older/obsolete equipment that may be broken, or cannot handle modern software.

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Not necessarily true

Besides having the Internet connections available to the public, it's important to have educated and entrepreneurial citizens. I've spent some time in Ukraine, a post-Soviet republic, which probably doesn't qualify as poor, when compared to African countries, but still has the lowest per capita among European countries.Many people there managed to use the Internet to find some opportunities. People who have translation or programming skills get freelance jobs, there are some other areas where Internet might be helpful in finding some income, while the offline world might not present those possibilities. Granted, a lot of online crime and credit card fraud is also coming from that area of the world as well, but that's happening thanks to the lax legislature and low spread of credit cards there, which is changing. But generally if you have people with education and desire to make a living, Internet is a major helper.